Warning on export traps

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About 20 Marlborough business people showed up to hear about the role of the New Zealand Export Credit Office, led by Tim Robertson at the NMIT campus in Blenheim yesterday.

The export credit agency is a subsidiary of the Treasury Department set up 11 years ago by the Government wanting to make the most of free trade agreements in the Middle East and China.

The agency works closely with New Zealand exporters, their banks and international buyers, selling Government-backed trade credit insurances and financial guarantees, when private credit insurers will not.

Robertson said they support trade into most developing countries such as Venezuela and Cuba, and also have experience and knowledge of trading conditions and banks in Europe, North America, Latin America, Asia, Australia, Pacific, Middle East and Africa.

It is important for New Zealand companies to do their due diligence before jumping in to trade with overseas markets, but the agency can shed light on some of the unknowns, he said.

Simple things such as the International Commercial terms (Incoterms) which outline the importers' and exporters' responsibilities, such as who pays for insurance, customs and freight from producer to market, are often overlooked, he said.

"I've seen a number of cases where the exporters have assumed the other party is paying, and it causes deals to immediately fall over because they haven't allowed for that cost."

WineWorks Marlborough supply chain development manager Anthony Barnes said it is surprising how much money people can save by shopping around and negotiating with forwarders.

"There is money to be saved . . . the first step is to talk to their agents and possibly negotiate different terms instead of doing what they have always done."

Forwarders recommended to exporters by their large overseas customers may not be able to offer the best terms to a small-scale exporter.

Exporters should shop around to find better prices and the savings could be shared by the customer and the exporter, he said.

Owner of the Marlborough consulting firm Aura, Roger Kerrison, said the agency's services would be useful for exporters struggling to fund offshore expansion.

"Small and medium exporters wanting to meet market demand, but can't because they are under-capitalised is a common trend."